Coinbase is out of the circle again. Consumer crypto applications may lead the next decade

Author: Nick Tomaino; Compiler: TechFlow

Introduction

Yesterday, Coinbase announced the launch of an app designed to simplify the process of users managing on-chain wallets and activities. For Coinbase, this new app is another step in its goal of becoming a "super app" similar to China's WeChat.

Crypto applications have been working hard to "break out of the circle", break through the niche market and enter the mainstream. For encrypted consumer applications, how can they successfully "break out of the circle"? This article will explore this issue and share some key experiences and insights.

Main text

I firmly believe that crypto applications will permeate every aspect of culture in the next decade.

The past decade has been focused on deep tech and finance, but in the next decade, we will see the convergence of crypto consumer applications with news, politics, sports, health/fitness, music, live video, podcasts, and more. These applications will become the most useful and valuable ever.

This is contrary to the view of many capital allocators, who continue to invest a lot of money in uninspired zero-sum products.

While the market is hyping up the 69th scalable L1 and yield-yielding stablecoins, developers are quietly building products that will spark new consumer behaviors that will help us reach over 1 billion users as quickly as possible and benefit the world.

I learned a lot through early involvement in many successful consumer applications that bridge crypto and culture (such as @coinbase, @opensea, @Polymarket, @dYdX).

If you’re thinking about the next generation of cutting-edge consumer crypto applications, here are four lessons that may be useful to you:

1. Success doesn’t happen overnight, so focus on something you truly believe in, not just making money, and stick with it for years.

   Polymarket was repeatedly considered unsuccessful, but founder @shayne_coplan and team always believed that prediction markets could bring more truth. They encountered many obstacles that would have made most people give up, but a deep belief in something beyond money helped them persevere.

   Polymarket had a trading volume of over $423 million in 2024 and played an important role in the 2024 US presidential election. Belief and persistence will eventually pay off.

2. The intersection of purists and tourists is key.

   Coinbase has deftly walked the line between purists and tourists for over a decade. If a product is too purist, it will remain niche and difficult to break out of. While there will be a small group of people who love it for its historical knowledge and nuances, a product built for purists will limit the size of the market.

   If a product is too tourist-oriented, people will love it for a while, then leave just as quickly. Easy come, easy go. In 2012, @brian_armstrong made the early design decision to offer a custodial wallet service because he believed non-custodial wallets were not conducive to mass market growth. Because of this decision, Coinbase is now a public company with a market cap of over $50 billion.

3. Deep understanding of users and market culture.

   When Opensea launched in 2018, it stood out despite other NFT marketplaces raising more money and attracting more high-profile investors.

   That’s because @dfinzer and @xanderatallah didn’t care about false reputations or making up imaginary company stories, they just focused on building a useful product. They talked to every NFT creator, attended every NFT event, and understood the culture more deeply than their competitors. Don’t be fooled by the surface narrative, dig deeper, and you will outlast those who play the surface.

4. Block out the noise of existing tribes and create your own.

   Truly useful applications don’t need to cater to any existing group, but can create their own. dYdX is leading the way in this regard. @AntonioMJuliano and his team started in the Ethereum ecosystem, then launched L2 powered by Starkex, and then the dYdX chain powered by the Cosmos SDK, and this practice may become more and more common in the future.

   Once you have proven the utility of your application, you can fully autonomously launch your own chain instead of ceding a lot of control and value to existing chains.

The past decade of consumer crypto adoption has been very interesting, but I believe the next decade will be a hundred times more interesting.